Fuel offer has Woolies lolling in the aisles

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Coles Myer shares yesterday briefly hit $9 - their highest level for almost five years - as investors shied away from rival retailer Woolworths just days before it puts out sales figures that will confirm it has lost custom to Coles and Bi-Lo supermarkets.

Coles Myer, like other retailers, appears to be also riding a rebound in consumer activity after the Federal Government late last month mailed cheques of $600 a child to 2 million families.

Coles Myer shares last traded at about $9 in September 1999 and exceeded that in early 1999 when interests associated with Solomon Lew, then a non-executive director, cashed out.

Mr Lew retains an interest in Coles Myer through his family's controlling stake in Premier Investments, a company whose prime asset is 5.7 per cent of Coles Myer's shares.

Analysts believe Woolworths shares will trade sideways until its management spells out what it intends to do with the newly launched $969 million joint bid for hotel chain Australian Leisure and Hospitality Group.

The chief executive of Woolworths, Roger Corbett, is likely to discuss his company's unusual offer for ALH when he unveils Woolworths' full-year sales figures on Monday.

Analysts believe Woolworths' established food and liquor stores will have increased sales by just 2 per cent in the June quarter, as Coles Myer drew customers with its offer of cheap petrol at Shell to anyone spending more than $30 at its supermarkets.

Woolworths' full-year group sales are tipped to rise 6 per cent to $27.8 billion.

But analysts believe the retailer will struggle to lift its sales growth for several months, because of repeated delays in rolling out its own discount fuel offer with partner Caltex.